Singapore real estate market 2018

1. Market Outlook and
Direction
Mani
Market Outlook and
Direction
Mani

2. Mani
(Subramanian
Veeramani)
8300 4411
Realtor,
PropNex Realty

3. Disclaimer:
While every reasonable cause is taken to ensure the accuracy of
information printed or presented here, no responsibility can be accepted
for any loss of inconvenience caused by any error or omission. The ideas,
suggestions, general principles, examples and other information presented
here are for reference and educational purposes only.
This presentation is not in anyway intended to give investment advise or
recommendations to buy, sell or lease properties or any form of property
investment. PropNex shall have no liability for any loss or expense
whatsoever, relating to investment decisions made by the audience.
All copyrights reserved.

4. Positive Sentiments
in the Real Estate
Market today

5. Resurgence in investor sentiments and
signs of recovery with price increase and
rising transactions
Source: The Business Times (22 Nov 2017)

6. 2018 looking like the year for
Singapore real estate market
long awaited turnaround
Source: The Straits Times (4 Jan 2018)

7. Credit Suisse Group and Morgan
Stanley are calling the end of Spore
property downturn
Source: The Straits Times (11 Jan 2018)
Report by Credit Suisse
Group and Morgan
Stanley

8. Morgan Stanley Research forecast higher sales
of new homes as a buoyant collective sale
market drives us demand while reducing the
supply of units to buy.
Source: The Straits Times (11 Jan 2018)

9. Source: The Straits Times (25Jan 2018)
Overall property market sentiment hit a high in 4Q
2017, rising confidence in market recovery in the
coming 6 months (According to NUS Real Estate
Sentiment Index (RESI) )

10. Source: The Straits Times (27 Jan 2018)
Market watchers expect developers to continue
replenishing their inventory

11. Singapore’s high-end properties
are more attractive to investors
in this region
Residential median price to income ratio in SG
(properties in CCR region)
fallen from 7.3 times in 2010 to 5.6 times in 2015
Source: URA, JLL
Research

12. URA Private Residential Index and
Volume of Transactions (2001 – 2017)
Source: URA, UOB Kay Hian, Media sources, PropNex
No. units transacted in whole of Singapore in 2017
New Sale 10,566
Subsale 401
Resale 14,043
TOTAL 25,010

13. Residential: The tide has turned
• 2017 posted a first full year growth of 1% in URA PPI since
2013, marking a turn in the Singapore property market.
• Property prices to rise 5-10% yoy in 2018 after bottoming out
last year.
• We foresee the nascent recovery spreading to the mid-range
and high-end segments in the next wave.
• This will be driven by replacement demand from en blocers and
a pick-up of home buying interest from foreigners on prospects
of a turnaround.

14. Private Residential:
(Price growth in 3Q 2017 & 4Q 2017, brings overall price
growth to 1.1% in 2017, after 3 years of decline)
Quarter
Property
Price Index
Quarterly
Change in PPI
2013Q3 154.6 0.4
2013Q4 153.2 -0.9
2014Q1 151.3 -1.2
2014Q2 149.7 -1.1
2014Q3 148.6 -0.7
2014Q4 147 -1.1
2015Q1 145.5 -1
2015Q2 144.2 -0.9
2015Q3 142.3 -1.3
2015Q4 141.6 -0.5
2016Q1 140.6 -0.7
2016Q2 140 -0.4
2016Q3 137.9 -1.5
2016Q4 137.2 -0.5
2017Q1 136.7 -0.4
2017 Q2 136.6 -0.1
2017 Q3 137.6 + 0.7
2017 Q4 138.7 +0.8
Source: URA,
PropNex Research
1.1%
Overall
Price
Growth

15. Total Resale transactions as of 4Q 2017:
14,043units
Source: URA, PropNex Research
Total Volume 2017: 25,010
Expected Volume 2018: ABOVE 25,000 range

16. En Bloc Fever
in 2017
And continuing in
2018…

17. “Blockbuster” Collective
Sale Deals in 2017 ALONE
Total No of Deals in 2017:
24 En Bloc Deals
Total Number of expected new units
12,762
Total Number of En Bloc-ed Units
3,138
Total Value of Enbloc Done
$9,764,750,000
Source: PropNex research as of 9 January 2018

18. Collective Sales 2017
(May to Oct)
*PSF PPR (Based on amount paid to owner and DC charge)

19. Collective Sales 2017
(Oct 2017 to Dec 2017)
Source: PropNex Research, as of 8 Feb 2018
*PSF PPR (Based on amount paid to owner and DC charge)

20. Collective Sales Continues in 2018
Value of deals in first 3 months: More than $5.6 Billion
S/N Contract Date Project Name Successful Bidder Transacted Price PSF PPR
1 11 Jan 2018 Park West SingHaiyi Group $1,131,500.00 $1069
2 20 Jan 2018 Kismis View Condo
Roxy Pacific Holdings and Tong Eng
Group MD
$102,710,000.00 $941
3 8 Feb 2018 City Towers Japura Development $401, 900,000 $1,847
4 14 Feb 2018 Pearl Bank Apartments CapitaLand $929,400,000 $1,515
5 15 Feb 2018 Riviera Point Macly Group $72,000,000 $1,461
6 15 Feb 2018 Cairnhill Mansions Low Keng Huat $362,000,000 $2,311
7 16 Feb 2018 Brookvale Park Hoi Hup Sunway $530,000,000 $932
8 4 Mar 2018 Hollandia FEC Properties $183,380,000.00 $1,703
9 10 Mar 2018 Eunos Mansion Fragrance Group. $220,000,000.00 $1,100
10 10 Mar 2018
Goodluck Garden
Qingjian group $610,000,000.00 $1,210
11 10 Mar 2018 Toho Mansion KBD Ventures, $120,430,000.00 $1,805
12 15 Mar 2018 Lotus at Jervois Fragrance Group. $463,000,000.00 $1,683
13 17 Mar 2018 Katong Park Towers
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$345,000,000.00 $1,280
14 19 Mar 2018 Pacific Mansion
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15 22 Mar 2018 Makeway View
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$189, 260, 000 $1626
Source: PropNex Research, as of 22 March 2018 *PSF PPR (Based on amount paid to owner and DC charge)

21. URA Private Residential Index and
En bloc sales (2001 – 2017)
Source: URA, UOB Kay Hian, Media sources, PropNex
Data in Table refelects as of 20 March 2018

22. Residential: En Bloc sales fever
• Collective sales still at 79% of 2006/07 cycle, suggesting more
room to run.
• Replacement demand from enbloc sales to fuel mid-/high-end
segment.
• More than 5,850 units have been taken out, and
correspondingly minted a similar number of millionaires seeking
replacement properties. (As of 20 March)
• We estimate that the 5,850 units taken out could yield about
21,700 new units. (As of 20 March)

23. Aggressive Land Bids
in 2017/2018

24. GLS Programme (1H 2005 to 1H 2018)
Source: URA, UOB Kay Hian, Media sources, PropNex

25. Residential: Government Land Sales
•The 1H18 GLS (8,045 units) programme has stabilised at about
the same level as number of units released in 2H17 GLS (8,125
units), after bottoming in 1H16.
•In planning 1H18GLS, the government has considered:
The strong demand for sites by real estate developers and a
pick-up in transaction volumes
Balanced with upcoming supply (around 38,000 units from en-
bloc and previous GLS sites without planning approvals) and
30,000 existing private housing units that are vacant.

26. Aggressive Land Bids
in 2017
Source: URA, PropNex Research

27. Aggressive Land Bids
in 2018
Close
Date Location Winner
Tender
Price Bid $PSF GFA (sq ft)
7-Feb-2018
Chong Kuo
Road
Lian Soon Holdings Pte. Ltd. and OKP Land
Pte Ltd $43,948,000 $680.81 64 551.708
7 Feb 2018 Handy Road CDL Regulus Pte. Ltd.
$212,200,000
$1722.33 123, 204.744
7 Feb 2018
West Coast
Vale CDL Regulus Pte. Ltd. $472,400,000 $800.03 590,480.748
Source: URA, PropNex Research as at 7 Feb 2018

28. Top 3 bids received for
GLS sites (Tender closed 30 Jan 2018)
Source: The Business Times, 31 Jan 2018
CDL bid for
Handy Road
was 12.3%
higher then
next bid

29. Source: URA
Side by side comparison of land
parcels at West Coast

30. Comparison of Land Bid in
West Coast 2015 vs 2017/18
Tender
Close
Date
Developer Gross
Floor Area
(SF)
Bid Psf Tender Price Selling Price
4 Aug 2015
EL Development
Pte Ltd
(Parc Riviera) 569,899.98 $551.15 $314,100,000
$1,200 psf
Average Selling
Price
9 Feb 2017
China
Construction
(South Pacific)
Development
Co.Pte Ltd
(Twin Vew)
493,637.04 $591.50 $291,990,000 $1,400psf
Expected
Selling Price
LATEST
30 Jan 2018
CDL Regulus
Pte. Ltd.
590,480.75 $800.03 $472,400,000
Above
$1500
Expected
Selling Price
Source: URA, PropNex Research as at 16 Mar 2018

31. Developer bid 7% more in 18
months for the same location in
Feb 2017 and 35% more
12 months later in Feb 2018

32. Foreign Buyers In
The Private Residential Market
(2000 to 2017)
Source: REALIS, UOB Kay Hian for PropNex Realty

33. Residential: Foreign Buying
•Increased foreigner participation to boost mid-
high end segment demand.
•Scope for Singapore to absorb potential capital
inflow from foreign buyers, as their transaction
volume still has room to grow.
•Chinese buyers has seen their purchases grow
in relative and absolute terms, over the years.
Their 2017 purchases was 4.4x times 2005.

34. Top four foreign nationalities –
Residential purchases
Chinese, Malaysians, Indians and Indonesians form the top foreign
nationalities making residential purchases.
Source: REALIS, UOB Kay Hian for PropNex Realty

35. Stamp duties for foreign home buyers
The levelling of taxation costs overseas has built up the relative appeal
of Singapore real estate to foreign buyers.
Source: Uob KayHian, various stat boards
*Highest tier rate for investment properties over £1.5m. No difference in rates
between foreigners and locals in London, UK.
10%
15%
4% 3%
12%
5%
15%
15%
4% 4%
3%
0%
5%
10%
15%
20%
25%
30%
35%
Singapore Hong Kong Vancouver Sydney Victoria,
Australia
*London, UK
Stamp duties on overseas buyers Increase
Jun'13
Jul'17
Nov'16
Aug'16 Singapore's 15% ABSD
Jul'16
Apr'16
10%
15%
4% 3%
12%
5%
15%
15%
4% 4%
3%
0%
5%
10%
15%
20%
25%
30%
35%
Singapore Hong Kong Vancouver Sydney Victoria,
Australia
*London, UK
Stamp duties on overseas buyers Increase
Jun'13
Jul'17
Nov'16
Aug'16 Singapore's 15% ABSD
Jul'16
Apr'16

36. Residential: Levelling of Taxation
•Although ABSD has risen to 15% (from 10%) in Jan 13,
overseas regimes have since caught up with harsher cooling
measures to limit foreigners’ participation.
•For e.g. Hong Kong has doubled its stamp duties on
overseas property buyers to 30% in Nov 16
•Taipei also implemented a punitive divestment gains tax of
as high as 45% in Jan 16 (with no expiration), dwarfing
Singapore’s Sellers Stamp Duty (SSD) of 12% (3 years limit)
•The levelling of taxation costs overseas has built up the
relative appeal of Singapore real estate to foreign buyers.

37. How other Real Estate consultancies predict
price increase in 2018
Source: The Straits Times (4 Jan 2018)
PropNex Predicts: 6 to 8 % price growth in 2018
First half, steady growth of 3%
Second half, greater growth of up to 5%

38. Expected Average Price PSF
for New Projects in 2018
(Based on PropNex Predictions)
Source: PropNex Projections
as of 16 Mar 2018

39. Will you make
a move in
2018?

40.  Take advantage of existing projects which
are priced lower in comparison to the
upcoming future launch.
 Look into Resale Properties
 Explore new projects launching in 2018

41. HDB MARKET:
Industry updates

42. HDB Resale PRICE INDEX (2007 – 2017)
Source: PropNex Research, HDB
Year Resale Price Index Y-on-Y change
2007 88.0 +17.5%
2008 108.8 +14.5%
2009 109.0 +0.2%
2010 124.4 +14.1%
2011 137.7 +10.7%
2012 146.7 +6.5%
2013 145.8 -0.6%
2014 137.0 -6.0%
2015 134.8 -1.6%
2016 134.6 -0.2%
2017 132.6 -1.5%

43. HDB Resale PRICE INDEX
(Last 4 Quarters 2017)
Source: PropNex Research, HDB
Year
Resale
Price Index
Q-on-Q
change
1Q 2017 133.9 -0.5%
2Q 2017 133.7 -0.1%
3Q 2017 132.8 -0.7%
4Q 2017 132.6 -0.2%

44. HDB RESALE TRANSACTIONS
(YEAR ON YEAR) 2012 TO 2017
Source: PropNex Research, HDB
1rm 2rm 3rm 4rm 5rm Exec Total
2012 Total 17 508 7171 9450 5810 2138 25,094
2013 Total 7 648 5630 6639 3785 1391 18,100
2014 Total 21 423 5510 6627 3623 1114 17,318
2015 Total 10 317 5538 7656 4388 1397 19, 306
2016 Total 6 266 5519 8603 4861 1558 20, 813
2017 Total 10 331 5543 9201 5293 1699 22,077

45. WHY IS IT NOT PRACTICAL FOR HDB
FLATS TO HAVE DOUBLE DIGIT GROWTH
ANNUALLY LIKE IT WAS IN THE PAST?
Year % increase Price
2016 - $500,000
*2017 + 10 $550,000
*2018 + 10 $605,000
*2019 + 10 $665,500
*2020 + 10 $732,050
SIMULATION OF DOUBLE DIGIT GROWTH OF A 5-RM
FLAT AT OUTLYING AREA OVER A 5-YEAR PERIOD
2021 + 10 $805,255
* Simulated possible growth compounded at 10%

46. WHY IS IT NOT PRACTICAL FOR HDB
FLATS TO HAVE DOUBLE DIGIT GROWTH
ANNUALLY LIKE IT WAS IN THE PAST?
Year % increase Price
2021 - $805,255
2022 + 10 $885,780
2023 + 10 $947,358
2024 + 10 $1,071,794
2025 + 10 $1,178,973
SIMULATION OF DOUBLE DIGIT GROWTH OF A 5-RM
FLAT AT OUTLYING AREA OVER A 10-YEAR PERIOD
2026 + 10 $1,296,871
* Simulated possible growth compounded at 10%

47. “With the positive sentiment in
residential market as well as huge
number of en bloc sales in 2017,
greater demand for HDB resale
properties expected with some en
bloc owners considering resale flats.
There is a likelihood that HDB prices
may well experience a positive growth
of 1 to 2 per cent in 2018.”

48. Are You
Ready To
Take Action?
Call 8300 4411
Mani

49. END.END.
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